Progress Software Corporation today announced that it has Software as a Service (SaaS)-enabled its Progress® Apama® Algorithmic Trading Platform to enable sell-side brokerage firms to offer both black box and completely customizable white box1 trading capabilities as a service to their buy-side clients. Apama maximizes the use of SaaS through:
• its rich, graphical, web-based dashboards;
• a new API that allows trading scenarios to be initiated and monitored from remote locations; and
• its native ability to rapidly create client-specific white box trading algorithms.

Using the SaaS model allows sell-side firms to more easily and swiftly deploy and customize Apama's white box trading strategies. The ability to customize Apama strategies allows sell-side brokers to develop their own interfaces and trading algorithms as part of bundled offerings made available to their buy-side clients. Sell-side firms can now more easily deploy and manage these innovative algorithmic trading strategies, and make them available remotely. With the Apama offering, they can also attract new buy-side clients by offering them access, as a service, to an innovative new trading platform.

Buy-side clients can now enjoy the benefits of being able to calculate more quickly the best stocks to trade and investments to make. Buy-side firms can access trading strategies recommended by sell-side firms, customizing those strategies to suit their own investment criteria. Additionally, the Apama SaaS platform is an intuitive, easy-to-use, low cost application that does not require continuous reliance on an IT department.

The Apama platform is the industry's first open, customizable algorithmic trading platform offered as SaaS. Included with the platform are a core set of pre-packaged, customizable, algorithmic trading screens, trading algorithms, and connectivity to the equities, foreign exchange, fixed income, and derivatives markets.

Christer Wennerberg, business development E-TCM, Skandinaviska Enskilda Banken (SEB), comments: "By taking a Software-as-a-Service approach at SEB, we can offer our buy-side analyst and trader clients a next generation, web-based, algorithmic trading solution that will give them an edge over their competitors. Our clients can quickly and easily roll out of their own unique algorithmic trading strategies, back-test these strategies to gauge their effectiveness and alter them once live in the market, improve their risk management measures and optimize their pricing benefits."

Apama SmartBlocks™, which are pre-packaged functions that include such algorithms as VWAP2, EWPA, MACD3 and others, can be included as part of a service delivery. SmartBlocks permit firms to reuse algorithms in different trading strategies or asset classes, as well as enabling brokers to create customized algorithms for each buy-side client. Brokerages can now provide more personalized algorithms that are tailored to the unique needs of each individual client.

The Apama Algorithmic Trading Platform has been adopted by leading brokerages, such as JP Morgan, SEB, Finamex, and Koscom (localized for Korea); the SaaS offering is also available through Progress Apama partner ULLINK, maker of the Odisys order management system.

Dr John Bates, founder and vice president, Apama Products, Progress Software, adds: "The relationship between sell-side institutions and the buy-side has been changing rapidly. The Apama SaaS option allows the sell-side to provide different levels of service to their buy-side clients. For example, it is possible for sell-side firms to offer one level of service where they provide 'black-box' trading to the buy-side; another level could include the ability to customize algorithms to the needs of the buy-side firm; or the ultimate offering could be where the sell-side firm provides the source for their custom algorithms via Apama SmartBlocks, which will enable the buy-side firm to create their own strategies and evolve, back test, and deploy new trading strategies, while retaining the advantage of broker supported connectivity and algorithms. It's a win-win business and technical model for sell-side and the buy-side firms."

A 'white box' trading tool is a computer program which contains algorithmic formulas and calculations that a trader can see and customize. A White box trading tool is often used to determine optimal trading practices, and generates many different types of data including buy and sell signals. The opposite of this is a 'Black Box' system, which cannot be seen by the user and cannot be customized.

2

VWAP (Volume Weighted Average Price) is a trading benchmark. VWAP is calculated by adding up the dollars traded for every transaction (price multiplied by number of shares traded) and then dividing by the total shares traded for the day.

3

MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator showing the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals.